The State Oil Fund of Azerbaijan (Sofaz) sold approximately 22 tons of gold in the first quarter, valued at over 3 billion US dollars.
This marked the first reduction in the fund's gold holdings since it began purchasing gold in 2012.
It is speculated that Sofaz’s move might be due to internal portfolio rules, as the proportion of gold assets in the fund reached 38% by the end of 2025, exceeding the stipulated limit of 35%.
The State Oil Fund of Azerbaijan (Sofaz) sold approximately 22 tons of gold in the first quarter, valued at over 3 billion US dollars at current prices.
In recent years, Sofaz has been one of the largest sovereign gold buyers globally, alongside multiple central banks, forming a key force driving gold prices to new highs repeatedly. According to its latest quarterly report, this sale marks the first reduction in its gold reserves since the fund began purchasing gold in 2012.
Although the fund did not disclose the reasons for selling its assets, it was speculated that Sofaz's move might be influenced by internal portfolio rules.
Previously, the surge in gold prices caused the proportion of Sofaz's gold assets to reach 38% of its total assets of 74 billion US dollars by the end of 2025. According to information on the fund's website, the maximum allocation for gold in its investment portfolio is 35%, with a permissible fluctuation range of 4%.
Against this backdrop, actively reducing holdings became a necessary operation for the fund to maintain compliance with its allocation ratio, rather than a simple market timing decision.
Meanwhile, this sale occurred amid a significant correction in gold prices at the end of the first quarter. The turmoil in global financial markets triggered by the Iran war, coupled with the rise in the US dollar and soaring oil prices, placed immense pressure on emerging market economies, prompting some countries to sell their gold reserves to protect their domestic currencies, leading to a large-scale sell-off in the gold market.
Emerging market countries such as Turkey also reduced their holdings simultaneously, causing a temporary weakening in the sovereign buying power that had previously supported gold prices. In March, the Central Bank of Turkey sold approximately 60 tons of gold, valued at 8 billion US dollars.
However, there are currently no signs indicating that Sofaz will continue to significantly reduce its holdings. Analysts suggest that this sale primarily reflects a passive rebalancing of asset allocation rather than an active withdrawal from gold assets.
Editor/Jeffy